WASHINGTON – The United States will probably force Canada to agree to greenhouse gas emission regulations for its oil and gas industry in return for approval of the Keystone XL pipeline, Saskatchewan Premier Brad Wall said.

Wall said in a breakfast meeting early Wednesday that Canada needs to give U.S. President Barack Obama the “environmental elbow room to approve (Keystone).”

“I’m saying that oil and gas regulations could provide some of that elbow room but I’m saying they ought not to be necessary,” he said. “The environmental case, the security case, the economic case for the pipeline is there.”

Emission regulations would put a price on carbon emissions throughout Canada. While this would potentially lead to higher energy prices for Canadians, it would also create a fund that could be used to finance emission reduction technologies, he said.

Canada has been promising emissions regulations for the fossil fuel industry for years but has yet to deliver.

In Canada’s recent submission to the state department’s 30-day public comment period on Keystone, however, Canada’s ambassador to the U.S. Gary Doer promised that Canada “is committed to further action including regulations for our oil and natural gas sectors.”

Recent statements from Obama indicate he wants Canada to agree to put a price on oil and gas emissions so he can justify approval of the Keystone XL.

“We think they (regulations) are coming pretty soon,” Wall said.

The Keystone XL, which will transport oil from Alberta and the Dakotas to Texas Gulf Coast refineries, would be the 75th oil and gas pipeline between the two countries.

“Why (Keystone) needs to be the trick to have it (regulations) passed I don’t know,” he said. He then added: “We’re harmonizing our emissions targets with the United States. So we are talking about the need for some specific oil and gas regulations. I don’t dispute that. I think that would be helpful.”

But the problem with the harmonization argument is that Canada is still not meeting its emission targets, according the federal government’s own greenhouse gas emission reports.

Wall will be meeting with congressional and administration officials this week to discuss Keystone, emission regulations and to emphasize the steps his province is taking to reduce greenhouse gases.

Keystone’s biggest challenge comes from its transformation, by the environmental movement, into a symbol of inaction on climate change, he said. This is hard to counter. “Those people aren’t interested in the facts,” he said.

He expressed surprise that the environmental issues around Keystone gained powerful currency in the U.S. Part of his message, he said, will be to stress that the inevitable alternative to the pipeline is rail, which creates higher emissions.

Given that oil transportation by rail in the U.S. has increased to 400,000 cars, from 8,000 cars since 2008, the difference is significant, he said.

He said the economic and security arguments for the Keystone pipeline “have been accepted, but the president and groups that have influence on the president are clearly more focused on the environmental questions.”

Still, he said, he remains hopeful because the pipeline retains broad support across the U.S. despite the environmental symbolism attached to the project.

On the question of why Canada is shipping raw bitumen to be refined in the U.S., which exports jobs and profits, he said, “the bottom line is when you have the third largest proven reserves in the world, you are going to have to move some raw product. You should refine where you can.”